United States

Report | This Time Could Be Different for January 17, 2018

Summary

​Historically, when interest rates rise, they tend to rise quickly. Even during the last five years, with interest rates at low levels, increases have come rather suddenly. Although that momentum was not sustained, this time could be different. Quietly, inflationary pressures built in the latter half of 2017. With the labor market tightening further and tax cuts likely to boost economic growth, the economy could experience further, more sustained inflationary pressure. That could become the catalyst for not only more lift at the long end of the yield curve, but also a greater number of increases at the short end. Investors should keep this in the back of their minds because inflation risk appears to be on the upside in 2018. ​